Tuesday, September 25, 2007

After many years of refusing to allow foreign law firms to open offices in India, the Indian Ministry of Law & Justice has relented. They will be able to establish offices but not practise Indian law.

The last attempt to set up an office was by Ashurst a few years ago. It found itself on the end of a lawsuit by the Indian Bar Association. No one has really tried since then although there have been a number of "alliances" but these seem for marketing purposes. As Legal 500 says, "Although Ashurst and White & Case have liaison offices in the country, these are currently limited to marketing activities. Both firms handle all legal work related to India from elsewhere."

Indian lawyers are frightened of being overrun by the big corporate western law firms. Of the 800,000 or so lawyers in India, most will not be affected. Indian lawyers practise in very small firms or solo, and much of their work is litigation. There are relatively few Indian corporate law firms. They will pick up work from the western firms because expertise will be in short supply.

Much of the demand for western law firms comes from Indian industry and commerce which needs seamless access to our capital markets.

It's strange how countries can be so advanced in certain areas yet behind in others. India is a leader in IT but its legal profession is still immersed in the days of the Raj.

Of course what is ironic about this is that Indian lawyers have already been invaded by the west through the outsourcing moves of American and English law firms who are looking for common law trained lawyers who are cheap. I've written on this before. (See also this interesting Bloomberg article.) When I did I received a somewhat different reaction to what I expected. Here it is below:

____________________

Dear John,

This is with regard to your posts in your Blog and few articles referring to Legal Process Outsourcing.

Not explaining much about the current trends about Legal Process Outsourcing in India (which of course is its in boom time), I wanted to draw your attention to an emerging trend in this industry. I am sure you must have noticed the rapid growth of Legal Process Outsourcing outfits in India and other low cost destinations. This is evident of the fact that how fast this industry is growing, but the opposing force is definitely the reluctance and the conservative nature of the Law firms worldwide and also the Large and Middle sized business houses. There is, though shining, a murky picture of this phenomenon. This is with regard to the individual growth of the outfits per se and not the country/ volume growth because of which new budding outfits have become “fly by night operations” and have to close down at rare times.

Keeping this is mind we have forayed into a new model of that of a Pivotal Provider in this area. We are called LexVantage Legal Solutions based out of India. We are a fledgling company yet growing steadily. We liaise between our clients and offshore legal services vendors and bring to our clients the finest LPOs or legal service vendors from India, Sri Lanka, Philippines and Malaysia etc. for any project that they may require assistance with.

We maintain databases of leading LPOs or similar providers and form partnerships/ alliances after a stringent selection process. We take care of the entire vendor selection process for them and project execution, management and delivery as well. This helps the clients to overcome the daunting task of selecting the right offshore provider for you and manage complicated outsourcing relationships.

As this could a new piece of information, I could provide you with more information. More about who all we serve and how. As you have an established field in the legal arena, we would like to know how you think we could have an access more in the market especially the UK market in the light of the conservative nature.

I hope we could exchange some insights and develop a mutually beneficial relationship.

It's great for parties. Look at the kitchen; it can hold 30 people easily.

And then there's the garden--my jungle. I'll let you have a glimpse.

Did any friends come?

No, except a neighbour from across the road. That was strange. Although we had a celebrity. After I'd finished one tour, Eleni and the two volunteers said, "Did you see him?" "Who?" "Alan Rickman came to see your house." I missed him.

Friday, September 14, 2007

Last month I published an article on barristers' clerks in Counsel Magazine (a magazine for barristers, clerks and more). One clerk I know said, "Now wait for the letters." I was thinking no one will be that interested to write.

Wrong! Let me quote a couple of reactions:

Dear Editor,

I was intrigued by the cover of this month ’s COUNSEL magazine – always essential reading.

Above the headline “The Barrister’s Clerk” there was a picture of an elderly gentleman in stripes a nd black jacket brushing down the suit of a rather suave-looking younger man who appeared to be wearing a cravat.

What I couldn’t ascertain was which of them was meant to be the clerk. Can anyone explain?

It is remarkably easy for me to slide into an indignant rant having just endured the extraordinarily ill-informed wafflings in Professor John Flood’s article on barristers’ clerks (“The Fall & Rise of Barristers’ Clerks”, August 2007). While there are snippets of superficial, factual accuracy and some interesting insights based on them, the Professor has chosen to base his essay on folklore and hearsay. In the process he has drastically over-simplified the complex and mutually beneficial working relationship that exists between two groups of dedicated professionals.

The Professor misses the point entirely while arguing his “hierarchy theories”. In support of his argument he quotes an offensive, age-old adage passed down from clerk to clerk and often attributed to many of the infamous clerks of yesteryear. It is not the clerk; it is the clients who set the pace. Clerks who appear to order their principals around are only doing so in the best interests of the clients, and if the clients are happy then it’s usually good for the barrister – and therefore good for the clerk.

The clerk is employed by the barrister, not as some sort of servile quasi-butler/minder, but as an aide, an agent and an adviser. He removes the burden of administration from the barrister so that the lawyer can concentrate on the law. The clerk earns his fee (and however it is paid, Professor Flood has got HM Revenue & Customs’ stance on those earnings completely wrong) for providing this unique service.

Contrary to his contentions, quite a lot has been written about clerks over the years; the Institute of Barristers Clerks hasn’t just introduced training for clerks; it isn’t a struggle for clerks to be heard and understood by committees; in the 1990s it wasn’t a collectively conscious decision by barristers to run their practices more professionally and there had been nothing amateurish hitherto about the organisation of the Bar – to suggest otherwise is offensive and utterly incorrect.

Yours sincerely, Keith Plowman, Senior Clerk, Ten Old Square

I am really curious to see if Mr Plowman will agree to be interviewed...

Wednesday, September 12, 2007

I've always had ambivalent feelings about teaching. There are born teachers who love it, but I became an academic primarily to pursue research. For me teaching was the "price" I paid to be part of the academic community that allows me to follow my ideas.

Recently I received an email from a former student of mine at Indiana University Bloomington who had been one of my first students when I started as an assistant professor in 1987. I had a joint appointment across criminal justice and law. My student said:

Professor Flood

I was unable to post the following in your website's guestbook, so I am emailing it to you:

I took two undergraduate classes with you almost 20 years ago during your tenure at Indiana University. The first was a Law and Society course; the second was a 400 level seminar on Law in Radically Different Cultures.

Even though I never followed through in pursuing a law degree, you had a very significant influence on me and remain one of my two favorite profs. I very much appreciated being allowed to "think outside the box." This encouragement carried me through a sizable chunk of my academic studies.

Monday, September 10, 2007

Credit risk has gone crazy. It appears to have emanated from the subprime meltdown in the US. What has struck me about the thirst for liquidity that has been brought about is that no one seems to have developed a secondary market in credit risk yet.

Last time there was a slump that had property as one of its causes--back in the late 1980s and early 1990s--(remember Olympia & York and Canary Wharf?) lawyers and bankers created a secondary market in distressed debt that became popular. (You can get a copy of my paper on this here.)

It had one side-effect which was to upset those grandees who managed the London Approach to corporate rescue. For those of you who know little of this, it is a set of principles coordinated by the Bank of England to enable banking creditors to institute a moratorium on debt payments, re-organize the failing company, and sell it off. As long as the business had little secured debt and was big, the bank creditors were able to restructure and refloat it.

It started coming apart when the vulture funds in the 1990s started buying the debt and trading it. The Bank of England never had quite the same control again as small creditors were able to sell out and avoid being trapped in a workout that had little benefit for them. The distressed debt traders did not have the same outlook as the bank creditors.

These vulture funds have mutated into hedge funds and other kinds of traders. ("Vulture fund" is a dirty word now for those who exploit the intricacies of sovereign debt of developing countries.)

Yet they haven't moved into the credit squeeze market. Banks are holding significant amounts of paper which their normal customers are refusing to buy. According to the FT trading volumes are too low for values to be properly estimated and so subject to manipulation and conflicts of interest.

If this crisis is to be overcome without the perils of moral hazard, a secondary market will emerge and begin to mop up. The debt traders will do well and the banks and private equity funds will suffer because they are too nervous to calculate risk. The banks will become traders when others have shown the way, which means they won't be able to get the big profits that the early traders will receive.

One last point on this: one professional group that will shine in this period will be the lawyers. After all, someone must do the restructuring work and who better than those who wrote the original agreements. The beauty of lawyering is that lawyers are simultaneously creators and destroyers, which is neatly summed up in this joke:

A surgeon, an architect an a lawyer are having a heated barroom discussion concerning which of their professions is actually the oldest profession. The surgeon says: "Surgery IS the oldest profession. God took a rib from Adam to create Eve and you can't go back further than that."

The architect says: "Hold on! In fact, God was the first architect when he created the world out of chaos in 7 days, and you can't go back any further than THAT!"

The lawyer puffs his cigar and says: "Gentlemen, Gentlemen...who do you think created the CHAOS??!!"

Sunday, September 02, 2007

My niece is attending law school in Greece, something which can only be described as a chaotic experience. The high point is the snakes in the library. Last year was her first year and it was bedeviled by academic's strikes against the introduction of private universities, no books, no computer or internet connections, and a complete lack of interest on the part of the law school in remedying any of this.

The snakes are still in the library! And of course the books are still in pristine condition. It's one way of keeping grubby student hands off them.

Students were supplied with their textbooks forty days before their first year final exams. It's a new form of "just-in-time" curriculum development. It worked for Toyota, so why not Greek law schools.

The upshot is that she failed some of her exams, which is no surprise. Perhaps the hardest part was obtaining the results. Did her law school put them on the internet? No. Did they mail them to students' homes? No. They posted them in the law school when everyone had gone home for the summer. Brilliant.

How do you then get your results? From either Pasok or New Democracy, the main political parties. You might think this a little strange, but this is one of the ways the parties extend their grip on the daily routines of ordinary life by making themselves essential to overcoming its obstacles. You then owe them a favour. Favour banks rule everywhere.

In a day or so my niece returns to take her resits. Given the arbitrary nature of the system so far, she doesn't know what to expect.

Why doesn't she go to law school overseas? Because as I have repeated in my work on globalization, law is the one thing which is resolutely local. If you want to practice law in Greece, you must learn Greek law and for that you need to get friendly with the snakes in the library. Be careful to carry anti-venom with you.